Ig heavy chain isotype switching in B lymphocytes is known to be preceded by transcription of a portion of the particular heavy chain gene segment that is targeted for recombination. Here, we describe an active role for these transcripts in the switch recombination process. Using an in vitro assay that exposes an artificial switch-mu (Smu) minisubstrate to switch region transcripts in the presence of nuclear extracts from switching cells, we demonstrate that free 3' ends of the Smu sequence are extended onto switch region transcripts by reverse transcription. The activity was induced in splenic B lymphocytes upon activation with LPS or CD40 ligand. This in vitro process is thought to be relevant to in vivo class switching for two reasons: 1) although only one-third of the Smu minisubstrate actually contains Smu sequence, all crossovers between switch regions occurred in the Smu portion; and 2) treatment of B lymphocytes with IL-4, which enriches for switching to S gamma 1, increases the ratio of Smu-S gamma 1 to Smu-S gamma 3 hybrids by 16% after LPS treatment and by 37% after CD40 ligand activation, implicating this S mu-primed reverse transcription of switch region transcripts as a novel mechanism of regulating the specificity of isotype switching. Further evidence for an active role of switch region transcripts was obtained by expressing S alpha RNA in trans in the Bcl1B1 B lymphoma line. Endogenous S mu-S alpha switch circles were detected in Bcl1B1 cells expressing exogenous S alpha RNA but not in mock-transfected cells.